The effects of subgrid-scale condensation and transport become more important as the grid spacings increase from those typically used in large-eddy simulation (LES) to those typically used in cloud-resolving models (CRMs). Incorporation of these effects can be achieved by a joint probability density function approach that utilizes higher-order moments of thermodynamic and dynamic variables. This study examines how well shallow cumulus and stratocumulus clouds are simulated by two versions of a CRM that is implemented with low-order and third-order turbulence closures (LOC and TOC) when a typical CRM horizontal resolution is used and what roles the subgrid-scale and resolved-scale processes play as the horizontal grid spacing of the CRM becomes finer. Cumulus clouds were mostly produced through subgrid-scale transport processes while stratocumulus clouds were produced through both subgrid-scale and resolved-scale processes in the TOC version of the CRM when a typical CRM grid spacing is used. The LOC version of the CRM relied upon resolved-scale circulations to produce both cumulus and stratocumulus clouds, due to small subgrid-scale transports. The mean profiles of thermodynamic variables, cloud fraction and liquid water content exhibit significant differences between the two versions of the CRM, with the TOC results agreeing better with the LES than the LOC results. The characteristics, temporal evolution and mean profiles of shallow cumulus and stratocumulus clouds are weakly dependent upon the horizontal grid spacing used in the TOC CRM. However, the ratio of the subgrid-scale to resolved-scale fluxes becomes smaller as the horizontal grid spacing decreases. The subcloud-layer fluxes are mostly due to the resolved scales when a grid spacing less than or equal to 1 km is used. The overall results of the TOC simulations suggest that a 1-km grid spacing is a good choice for CRM simulation of shallow cumulus and stratocumulus.